Govt plans to end role of Bappenas criticized

Dadan Wijaksana, The Jakarta Post, Jakarta Post

Economists have raised questions over a government policy allowing the finance ministry to take over the drawing up of the country's short- and medium-term economic development programs from the National Development Planning Board (Bappenas).

Umar Djuoro and Dradjat Wibowo told The Jakarta Post on Thursday that the move would give much greater authority to the finance ministry, which is already overburdened with its current task of preventing a fiscal crisis.

"The finance ministry is already overstretched. It already has plenty of areas to cover. I'm afraid the inclusion of a new task would make the ministry even less efficient," Umar said.

Dradjat was more focused on the control mechanism because the new development planning task meant a wider span of bureaucracy, which would necessitate a wider span of control.

"This will create a piling up of authority within the finance ministry, making it a 'fat' bureaucracy, making it hard to control, as the span of control would be too wide," Dradjat said.

The two were commenting on the recent enactment of the state finance bill, which would effectively end the role of Bappenas in determining and drawing up development programs in the country.

Under the bill -- which awaits President Megawati Soekarnoputri's signature to become a law -- activities relating to the country's fiscal policies will be all under the authority of the finance ministry, which will no longer have to coordinate with Bappenas as it had to previously.

This will effectively scrap Bappenas' workload as its existing duties will no longer exist.

Currently, Bappenas is obliged to actively participate in the drawing up of macroeconomic targets, yearly state budget figures and the five-yearly national development program (Propenas).

The bill says that, Propenas -- which had been used as the main reference for the making of annual state budget -- is no longer suitable and realistic for the current fast-changing economic framework.

The replacement for Propenas will be a document called the Medium-Term Expenditure Framework (MTEF), which is an economic guidance made for a three-year period.

Elsewhere, Dradjat and Umar also questioned the ability of human resources at the finance ministry to properly deal with the new task.

"The staff at the finance ministry, both in terms of numbers and skill, is not sufficient to accomplish such a tremendous workload," Dradjat added.

Umar agreed, saying: "Even if there is a massive movement of personnel from Bappenas to the finance ministry, still it would not be efficient, because time for adjustment would be needed."

Bappenas, established 40 years ago, in the past, particularly during the administration of president Soeharto, was a very powerful agency as all key projects had to pass through the office for approval.